The eleventh of November is now the biggest shopping day in the world – Singles’ Day. Last year a record-breaking $17.8bn (£13.5bn) of sales were made, up from $14.3bn in 2015.To put this in perspective, Cyber Monday and Black Friday online sales combined were $6.37bn in 2016. Just one day in China exceeded Brazil’s total, annual e-commerce sales.
While the cultural origins of Singles’ Day are rooted far away from the world of e-commerce, this was transformed when Alibaba started to offer shopping deals tied to the annual event. Other retailers soon followed suit, and it’s now a pillar of the online retail calendar where shoppers, regardless of their single status, are encouraged to treat themselves to a purchase.
Interestingly, the sheer scale of the domestic market plus Chinese consumers’ appetite for British goods has created a new sales opportunity for UK retailers on Singles’ Day. Buying British is fashionable in China; the China-Britain Business Councilhas commented that this could be a result of the buzz generated by the popular TV series Downton Abbey and Sherlock, which left Chinese consumers with a thirst for all things British.
Brands like MAC and Estée Lauder are already using this opportunity to take a foothold in the market. The decreasing value of British pound also adds to the attraction of buying goods from the UK. Chinese shoppers can purchase luxury products for less than they can in China.
The tide won’t turn
Within our UK network on Singles’ Day last year, there was significant appetite for high-end luxury products as well as apparel and accessories, toys, department store goods, travel and home improvement products. In fact, 39% more transactions took place on the 11th compared to an average day.
Interestingly, recent research by L2 found that luxury brands can be easily found online in China whether they choose to be or not. The internet has created the opportunity for borderless commerce and as a result of the interest in British brands, retailers need to understand the exposure their products have in international markets, otherwise they risk losing control and having their brand equity hijacked by third-party sellers.
If a brand doesn’t offer delivery to China that won’t necessarily put shoppers off purchasing either. Chinese consumers have developed ways to shop with international retailers regardless of whether the brand has developed the technologies to ship to their region. These include shopping trips abroad, personal shopping services and freight forwarding. A record number of Chinese tourists have visited London in 2017 with the purpose to shop. Chinese tourism is worth nearly £500m to the UK, with the average holiday lasting 10 days and each tourist spending an average of £2,688.
Dangerous discounts to avoid
However, competition is tough on Singles’ Day and brands must offer the best discount they can afford, whilst maintaining the quality of their products and the customer experience. 81% of people now value quality over price with regard to Singles’ Day purchases so especially when there may be high shipping costs associated with buying the product, shoppers will think twice about purchasing. Discounts have to be chosen carefully for cultural reasons too. The number four signifies death so discounts such as 40% and 44% should be avoided. However, the number eight signifies good fortune so it could be beneficial to factor that into your promotions.
Across our network, in the four days leading up to Singles’ Day, we tend to see an increase in click volumes coming from Chinese IP addresses, but a relatively low conversion rate until the day itself. This suggests that Chinese shoppers are researching products ahead of Singles’ Day and then making informed purchases based on which retailer will offer the best deal.
Ultimately, we’ll continue to see the globalisation of Singles’ Day. The power of the Chinese market means that the opportunity for brands abroad is eye-watering. However, brands will need to adapt their marketing to address the nuances of their digital landscape, looking to apps like WeChat and Weibo over Facebook and Twitter, and ensuring they understand the cultural differences in how they communicate. Buying British is in vogue and the Chinese market is hugely influential; Black Friday clearly has an international successor.
Abi Jacks is the director of marketing, UK at Rakuten Marketing